Firm Performance in Bulgaria and Estonia: The effects of competitive pressure and disorganization

Abstract

This paper is concerned with the analysis of firm performance, measured as total factor productivity, using a panel of over 1200 Bulgarian and 200 Estonian firms. The main empirical conclusions are (i) higher Financial and competitive pressure improves firm performance in Bulgaria; (ii) disorganization, measured by complexity of a sector, has a negative effect on productivity growth in Bulgaria; (iii) in Estonia there no evidence can be found that Financial pressure, competitive pressure nor disorganization has any effect on firm performance, suggesting that these factors only matter at the start of transition to a market economy.